Portfolio Review for 8th September 2021

 

Please click and read this disclaimer if you wish to continue with the contents below.

For my previous portfolio review click here

YTD(2021) I have made a total profit of S$22,052.38 from my equity investments(predominantly in HK) with an XIRR of 10.42%(XIRR is annualized). From my 6 years of tracking, I have made a total of S$121,695.03 from this portfolio alone.

The China anti-trust/monopoly crackdown has shocked the market and caused massive irrational selling, especially in the tech sector which I am most vested in. The selling might be showing signs of bottoming these few days, but one can not be completely certain.

Articles like this is giving confidence back to the capital markets. CCP actually wants to open up its capital markets more to foreign investors. If you have tracked the pulse of the market, many stocks on HKSE are being connected to Shenzhen and Shanghai. This means the VIE structure is here to stay as gradually and ultimately, most of the domestic Chinese will own shares of VIE structure on HKSE. 

Portfolio composition(1 index etfs and 23 stocks):

Recent Transactions:

Sold all Cosco Intl HK(HK:517) for 37.26% profit

Sold all Qingling(HK:1122) for 20% profit

Sold all Xinyi Energy(HK:3868) for 33.21% profit

Sold all Teladoc(US:TDOC) for 9% profit

Sold all Tracker Fund(HK:2800) for 23.32% profit

Sold all APT Satellite(HK:1045) for 0.84% profit

Sold all Fu Shou Yuan(HK:1448) for 6% profit

Sold all Netease(HK: 9999) for 5.05% profit

Sold all Sinopec(HK:386) for -2.97% loss

Initiated a 4% stake in Tencent(HK:700) 

Initiated a 5.86% stake in Kuaishou(HK:1024)

Initiated a 3.93% stake in AK Medical(HK:1789)

Initiated a 4.29% stake in Tencent Music(US:TME)

Initiated a 3.04% stake in IQIYI(US:IQ)

Added more Central China New Life(HK:9983) to 3.02% of port

Added more JDHealth(HK:6618) to 4.41% of port

Added more Weimob(HK:2013) to 6% of port

Added more China Youzan(HK:8083) to 6.6% of port

Added more Kingsoft(HK:3888) to 5.04% of port

Added more Chanjet(HK:1588) to 3.83% of port

Added more Haidilao(HK:6862) to 3.61% of port

Added more GDS(HK:9698) to 5.34% of port

Added more XD(HK:2400) to 3.38% of port

Added more Alibaba(HK:9988) to 5.87% of port

Added more Ishare HSTech ETF(HK:3067) to 3.86% of port

Commentary:

This past two months gave me the opportunity to take profit for my net net value investments and buy more into higher conviction Chinese tech stocks that have been brutally sold down. I also swapped Netease with Tencent seeing that the latter has dropped more severely and is more diversified. Tencent has also been aggressively buying back their own shares daily. In terms of gaming wise, I prefer Tencent more because games like Honor of Kings and Wild Rift/League of Legends(from their controlling stake in riot) has unlimited lifespan and is extremely popular world wide and in China. Tencent has dropped to a level where a slight premium to its price to fcf against Netease is warranted seeing both the quality of assets and moat are superior to Netease.

Inspur(HK:596) continues to trend higher. Even at the current price, its still the cheapest Saas company in China in terms of price to sales. With no government policy risk(state owned) and the recent announcement of certain states asked to transfer state owned enterprise cloud out from private and into government run cloud, the growth prospect of this third largest cloud company in China looks promising. The risk I see is their cloud conversion is slow as they still focusing very much on growing their enterprise software and not like Chanjet which has stopped their enterprise segment and focused on cloudification which they have reached 85% of revenue now.

Kingsoft(HK:3888). It is obvious that this holding company is trading at a big discount compared to its sum of parts. Their WPS business which is listed on Shanghai has a market capitalization of HK$139.2 billion. KingSoft has a 50.1% stake in it which is worth around HK$69 billion. Kingsoft market cap is only HK$45.16 billion. This means their stake in Kingsoft Cloud, their gaming segment and their HK$19bil cash are all free. Good to know that the company is currently buying back its own shares too.

China Youzan(HK:8083) is currently on the verge of being privatized. Their core Youzan Technology will be listed on to the mainboard. If successful shareholders will get cash from the payment segment and Youzan Technology shares. Youzan's payment segment which has a very low revenue to asset ratio will be privatized and White Crow's personal stake in the company will be listed. No more than 5% of its shares will also be offered to the public. Including the cash offer of their payment segment the price given was HK$1.4654. My gut feel is the share price should ultimately go above HK$1.4654 for the public IPO to be successful. Being the largest decentralized ecommerce Saas in China with a market share of 7% it is now and will soon be more of a pure ecommerce Saas company unlike Weimob which still has the bulk of their revenue in advertising. 

My Glendale Park Property Update

 

Recently gotten a new tenant. The take up rate is pretty fast no vacant week. Did minor cleaning and some patch work for the house. Changed a tap and did servicing for the aircons. The aircon people even changed the whole aircon cover as well, quite efficient.

The previous tenant is pretty helpful too. He polished all bedroom flooring before the handover. The rental payment has gone up by another $100.

Capital appreciation wise for this month. If I based it on the latest July transaction which is of low flooring. The psf is $1,422. We bought our unit at $1,147 in 2019. That means a 24% capital gain in two years, excluding rental. Reason is likely due to low interest rates increases buyer demand and the large price gap between new 99 years launches and the old freehold as mentioned in my previous article.

URA released another set of 2Q 2021 data:

The price and rental index continues to inch upwards. 

(Prices of landed properties decreased by 0.3% in 2nd Quarter 2021, compared with the 6.7% increase in the previous quarter. Prices of non-landed properties increased by 1.1% in 2nd Quarter 2021, compared with the 2.5% increase in the previous quarter.

Prices of non-landed properties in Core Central Region (CCR) increased by 1.1% in 2nd Quarter 2021, compared with the 0.5% increase in the previous quarter. Prices of non-landed properties in Rest of Central Region (RCR) increased by 0.1%, compared with the 6.1% increase in the previous quarter. Prices of non-landed properties in Outside Central Region (OCR) increased by 1.9%, compared with the 1.1% increase in the previous quarter. 

Rentals of private residential properties increased by 2.9% in 2nd Quarter 2021, compared with the 2.2% increase in the previous quarter.

Rentals of non-landed properties in CCR increased by 3.1%, compared with the 2.9% increase in the previous quarter. Rentals in RCR increased by 2.8%, compared with the 2.0% increase in the previous quarter. Rentals in OCR increased by 3.6%, compared with the 2.1% increase in the previous quarter)

Again the market favors the Condo OCR assets more than the rest. Condo price growth qtq has slowed, but OCR price increase has accelerated qtq. Even rental in OCR has increased by 3.6% more than previous quarter. Among residential, office and retail. Residential again showing the lowest vacancy rate among the three. (6.3% vs 12.6% vs 8.5%). A 0.1% improvement in vacancy qtq for residential but office vacancy rate has gone up quite substantially, likely due to covid and wfh arrangements.

I continue to believe that there is a substantial price discrepancy in old freehold condos in good location. Some of these assets are not maximized to their full gfa/plot ratio potential yet. So price appreciation and enbloc potential are there as long as I don't time the market and hold it long term.

See how it goes.

Savings Accounts and Credit Cards 29th June 2021

 

If you haven't read my previous post on this topic can click here.

My savings account strategy remained similar:

BOC Smartsaver: 1.45% pa for $80k(hurdle account). Topping up Grab using BOC Great Wall Debit is counted as credit card spending. You can transfer the amount back to your BOC Smartsaver after. 

Singlife: 1.5% pa for $10k. You can top up $500 to Grab using Singlife debit card and transfer back to qualify for the additional 0.5% pa. Recently nerfed from 2% to 1.5% pa net.

Dash EasyEarn: 2% pa for $20k

Dash PET: 1.7% pa for $30k

Great270: 2.72% for 20k. 5 years maturity, starting 8th May 2018 matures on 8th May 2023. This works out to be a monthly interest of $45.33. GE recently gave all GE270 customers food vouchers amazing.

Commentary:

Credit card wise, I am currently using UOB absolute 1.7% cash back to top up Grab Mastercard, then use the reward points earned through spending to buy into star point vouchers during 35% point back promotion and use SP service plant rank to redeem capitastar voucher at 30% star discount.

Another thing I notice is that if I set my grab autoinvest to $5 and slowly accumulate money inside, I can transfer out back to my bank account via paynow. This means I can transfer the bulk of my credit card top up money(which earns 1.7% cash back) back to my bank account. A good strategy if you want to convert your credit card top up money to transferable money.

What I do is I use Q10 to buy foodpanda vouchers using the 20% cart discount, then use GPMC to pay for the small excess after applying the voucher to proc the $5 autoinvest.

I am investing more of my cash now into HK and US equities. My TWR so far ytd: